*Microgrid DOI: http://dx.doi.org/10.5772/intechopen.88812*

*Research Trends and Challenges in Smart Grids*

*Global investment in renewable energy in billions.*

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**Figure 2.**

**Figure 1.**

*Microgrid and its components.*

With the increase in power demand and raise in the global warming plays a critical role in distributed renewable energy sources. Local generation sources such as wind, biomass, solar, microturbines, and fuel cells are the future renewable sources. Latest power grids have advantages like integration of green energy, scalability, and modularity supported by different renewable and non-renewable energy sources.

Microgrids are the latest evolving grid which effectively extract power and manage in the distributed energy sources. Microgrids are the future grids of the world. The components of microgrids are distributed energy sources such as PV cells, fuel cells, wind turbines, and mini hydro turbines. along with storage devices such as fly wheels, energy capacitors and batteries and diesel generators for peak load management as shown in **Figure 2**.

Microgrids are operated in two modes such as grid connected mode and islanded mode. Microgrids are low voltage grid which can be operated in autonomous state and non-autonomous state. The effective coordination of the components or sources involved in a microgrid will provide energy as minimum cost with high reliability in power supply. Microgrids are the classical example of smart grid applications. The data communications in all nodes of microgrids make the power management much more effective and accurate. Microgrids are low voltage, low power grids ranging from few kW to hundred kW. Based on the size of the load specifications and its applications, microgrids are called as mini grids, house grids, university grids, army grids, and nanogrids [6–13].
